After ensuring everyone is safe and getting necessary medical treatment, you will want to pursue a settlement to cover car accident damages like vehicle repairs, medical bills, lost income, and more. But many people aren't sure exactly how car accident settlements work.
Here, we'll break down the key things you need to know about the car accident settlement process. While every case is different, understanding what to expect can make the process less overwhelming. And remember, consulting an experienced car accident lawyer is always recommended to ensure your rights are protected and you receive fair compensation.
What Is a Car Accident Settlement?
First, let's define a settlement in the context of a car accident. A settlement is an agreement between the parties involved in the accident to resolve the case without going to trial.
Usually, this involves the at-fault party's insurance company paying an agreed-upon amount of money to the injured party (or their insurance company if they have collision coverage) to cover damages.
The settlement amount is negotiated between the injured party and the insurance company, often with the help of lawyers on both sides. If a fair agreement can't be reached, the case may go to trial for a judge or jury to decide the outcome. However, the vast majority of car accident cases are settled before trial.
How Does the Settlement Process Work?
Once you decide to pursue a settlement, the process typically follows these general steps:
- Your car accident lawyer sends a demand letter to the at-fault party's insurance company detailing your damages
- The insurance company investigates the accident
- The insurance adjuster makes an initial settlement offer (often a "lowball" offer)
- Your car accident lawyer negotiates with the adjuster to reach a fair settlement amount
- If a fair settlement is reached, you'll sign a release of liability in exchange for the payment
- The settlement check is sent to your lawyer, who deducts their fees and pays out the rest to you
Your lawyer will handle most of the back-and-forth negotiations.
What Factors Affect a Car Accident Settlement Amount?
Many variables can impact how much compensation you ultimately receive in a settlement.
Some key factors include:
- The extent and severity of your injuries
- Whether the injuries are permanent
- The amount of medical bills incurred
- Whether you'll need future medical treatment
- The amount of lost income due to missed work
- The available insurance coverage limits
- Whether you were partially at fault for the accident
- Strength of evidence proving the other party was at fault
Your lawyer's negotiating skills can also play a big role in maximizing your settlement amount. That's why it's important to choose an experienced car accident attorney you trust to advocate for your interests.
What Types of Damages Can a Car Accident Settlement Cover?
A settlement can provide compensation for a variety of damages resulting from the car accident, such as:
Medical Expenses
One of the primary types of damages a car accident settlement covers is medical expenses related to injuries sustained in the crash. This includes bills for hospital stays, doctor visits, surgeries, prescription medications, medical devices, and other treatment costs.
It's important to keep thorough documentation of all medical expenses. Your lawyer will use your medical records and bills to prove the extent of your injuries and justify a higher settlement amount.
In addition to past medical expenses, a settlement can also cover expected future medical costs. For example, if you need ongoing physical therapy or additional surgeries down the road, those projected costs can be factored into your settlement.
Lost Income
Car accident injuries often cause victims to miss work while they recover. A settlement can provide compensation for that lost income.
You can claim lost income for time missed due to medical appointments, hospitalization, at-home recovery, or other accident-related reasons. Provide your lawyer with documentation from your employer verifying your normal income and the time you missed due to the accident.
If you used vacation days or sick leave during your recovery, you may be able to claim that as lost income since you were forced to use that time for the accident.
Reduced Earning Capacity
In some cases, car accident injuries may be so severe that the victim cannot return to their previous job or have to take a lower-paying position. This is known as reduced earning capacity.
For example, if a construction worker sustains a permanent back injury and can no longer perform their physically demanding job, they may have to take a lower-paying desk job or even go on disability.
A car accident settlement can compensate for the difference in income you would have earned in your previous role versus what you will now earn in a lower-paying job or on disability. Proving reduced earning capacity usually requires testimony from medical and occupational experts.
Pain and Suffering
Victims can also receive compensation for non-economic damages like pain and suffering.
Pain and suffering damages are based on the physical pain and discomfort caused by your injuries. More severe and prolonged injuries will warrant higher pain and suffering damages.
These damages are more subjective and difficult to quantify than medical bills or lost income. Insurance companies often use a multiplier to calculate pain and suffering, multiplying your economic damages by a number whose size varies based on injury severity.
Your lawyer can argue for a higher multiplier by emphasizing the extent of your injuries and presenting evidence of how they've impacted your life. In some cases, they may also bring expert testimony from doctors or mental health professionals.
Emotional Distress
Car accidents don't just cause physical injuries - they can also result in significant mental and emotional trauma.
Victims may experience conditions like:
- Post-traumatic stress disorder (PTSD)
- Depression
- Anxiety
- Insomnia
- Fear or avoidance of driving
A settlement can provide compensation for this emotional distress. Your lawyer may advise you to keep a journal documenting your mental state and how the accident has impacted you emotionally. Testimony from a therapist or psychiatrist can also help prove the extent of your emotional distress damages.
Loss of Enjoyment of Life
Some car accident injuries may prevent you from participating in activities and hobbies you previously enjoyed, leading to a loss of enjoyment of life.
For example:
- A leg injury prevents a runner from ever running again
- Chronic pain from the accident keeps someone from playing with their children
- Disfiguring facial scars cause someone to avoid social situations
Though harder to quantify, these damages are real and can significantly impact your quality of life. Your lawyer can argue for compensation for loss of enjoyment by highlighting the activities you can no longer do or enjoy because of the accident.
Vehicle Repair or Replacement
If the accident damaged or totaled your vehicle, you can pursue compensation for repair or replacement costs. Usually, the insurance company will pay the cost of repairs up to the fair market value of your vehicle. If the repair costs exceed the value, they will declare your car a total loss and pay you the fair market value.
Diminished value can also be claimed if your car is worth less after repairs from the accident than it was before. A car accident attorney can advise whether it's worth pursuing a diminished value claim.
Rental Car Costs
If you need a rental car while your vehicle is being repaired or replaced after an accident, you can include those costs in your settlement demand. Save all receipts and invoices from the rental company to document the expense.
Some insurance policies have rental car coverage covering costs up to a certain amount or time after an accident. Your lawyer can help you understand your coverage and rights.
Other Out-of-Pocket Expenses
Many other expenses often arise after a car accident.
Examples include:
- Transportation costs to and from medical appointments
- Prescription and over-the-counter medication costs
- Assistive devices like crutches or a wheelchair
- Home modifications to accommodate a disability from the accident
- Household services like child care or cleaning if your injuries prevent you from performing those tasks
Keep track of all out-of-pocket costs you incur because of the accident. Even small expenses can add up over time. Your lawyer can determine which expenses can be included in your settlement demand.
Some of these damages, like medical bills and lost income, are easier to quantify with documentation. Others, like pain and suffering, are more subjective. Your lawyer can help estimate the potential value of your case.
When to Expect Your Settlement Check
Once you agree to a settlement amount, it typically takes between four to six weeks to receive the actual check. The check is usually sent to your lawyer, who will deposit it in a special escrow account.
Before you get your money, your lawyer will deduct their contingency fee and any case expenses. They'll also pay any medical liens placed on the settlement by health insurance companies or healthcare providers that covered your treatment. The remaining balance is then issued to you as a check.
What if the At-Fault Party Doesn't Have Insurance?
If an uninsured driver hit you, you have options for pursuing compensation:
- File a claim with your own insurance company if you have uninsured motorist coverage
- Sue the at-fault driver directly
- File a claim with your health insurance and/or use your own Med Pay coverage to pay medical bills
- Explore other sources of coverage, such as the at-fault driver's employer if they were working at the time
Given your situation, a car accident lawyer can advise you on the best path forward. A skilled attorney will know how to maximize your recovery.
Should I Accept the Insurance Company's Settlement Offer?
You should never accept a settlement offer without consulting a lawyer first, especially if you've suffered a severe injury. Insurance adjusters are trained to settle cases for as little as possible. They do not have your best interests in mind.
Your lawyer can evaluate whether an offer fairly compensates you by considering:
- Past and future medical expenses
- Lost income and reduced earning capacity
- Pain and suffering and emotional damages
- Strength of evidence against the at-fault party
- Potential jury verdicts in similar cases
If your lawyer believes you deserve more, they can present evidence to justify a higher amount and continue negotiating with the insurance company. The initial offer is usually just a starting point. Don't be discouraged if it's lower than you think is fair.
Contact a Car Accident Lawyer Today
Dealing with the days and weeks after a car accident is never easy, but you don't have to go through it alone. If you suffered an injury by another driver's negligence, the best thing you can do is speak to an experienced car accident attorney.
An experienced car accident attorney in your area can review your case for free and advise you on your legal options.
Most accident victims are surprised to learn the true value of their case. Insurance companies use car accident victims' lack of legal knowledge to pressure them into accepting lowball settlements. Having a skilled lawyer shows that you mean business to the insurance company. It greatly increases your odds of obtaining full and fair compensation.
Don't wait to get the legal representation you need. Contact a reputable personal injury law firm today for your free case evaluation. You have nothing to lose and potentially a lot to gain. Remember, you won't pay any upfront or out-of-pocket costs. Your lawyer only gets paid if they win a settlement for you.
Call now to get started on the path to justice. You have nothing to lose and much to gain by taking action today.
